5 things about Forex every trader needs to know
Beginners in the Forex market often find themselves overwhelmed by the amount of information there is on the subject. It is hard to determine where to start, what to learn, and how to use this knowledge. Below, you will find five essential things you should know about Forex to open your first trade.
To get a more thorough introduction, join the Malay-language workshop by the OctaFX trading expert Cikgu Danie on 19 May 2023. There you will get all the basic knowledge needed to start trading. You will also be able to put it into practice in a trading platform. Workshop participants will get a promo code to double their deposit, a special certificate of attendance, and a PDF handbook full of useful trading tips and essential basics.
5 Forex trading essentials
1. Types of financial assets
There are several types of financial instruments you can trade with almost any Forex broker. Those include currencies, commodities (such as gold, silver, crude oil, natural gas), indices, stocks, and cryptocurrencies. They are typically offered as contracts for difference (CFDs) and mostly represented in pairs, e.g. EURUSD, XAUUSD, BTCUSD. Indices and stocks have ticker symbols, such as NAS100 (Nasdaq 100), AMZN (Amazon), and TSLA (Tesla).2. Market volatility and liquidity
While market volatility is what makes it possible for traders to get profits in very short time frames, it may also lead to sudden price movements in unwanted directions. Be sure to include this risk in your trading strategy and prepare adequate measures to mitigate it.Liquidity is the ability of a financial instrument to be bought and sold on demand. For example, major currency pairs are highly liquid—it's easy to buy and sell them without much impact on their price. However, minor and exotic currency pairs typically have less liquidity. Traders might encounter gaps and difficulty in trading them at the desired prices. Therefore, you might want to trade when liquidity is at its highest—when London and the U.S. trading sessions overlap—from 12:00 PM GMT to 4:00 PM GMT.
3. Fundamental and technical analyses
Both fundamental and technical analyses are essential when developing your own trading strategy and determining entry points for your trades. Fundamental analysis serves to evaluate the impact of economic events, news releases, and geopolitical factors on the prices of financial instruments. Technical analysis is used to study historical price data and identify patterns or trends that may reoccur in the future.4. Leverage in trading
Forex leverage not only increases your potential profits, but also risks. It's extremely important to use leverage responsibly, as it might quickly magnify your losses should the price go in an unexpected direction. Watch your margin level closely and set Stop Loss orders to prevent the trade from taking too much of your capital.5. Risk management
Using risk management techniques is crucial in professional trading. This includes setting Stop Loss orders to limit potential losses, determining appropriate position sizes based on your account balance and risk tolerance, and diversifying trades across different assets.To learn even more about Forex essentials, join the workshop by Cikgu Danie on 19 May 2023.
Hashtag: #Forex #Education #OctaFX
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About OctaFX
OctaFX is an international broker that has been providing online trading services worldwide since 2011. It offers commission-free access to financial markets and a variety of services already utilised by clients from 180 countries who have opened more than 40 million trading accounts. Free educational webinars, articles, and analytical tools they provide help clients reach their investment goals.
The company is involved in a comprehensive network of charitable and humanitarian initiatives, including the improvement of educational infrastructure and short-notice relief projects supporting local communities.
In the APAC region, OctaFX received the 'Best Forex Broker Malaysia 2022' award and the 'Best Global Broker Asia 2022' from Global Banking and Finance Review and International Business Magazine, respectively.
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